PELICAN RESOURCES LIMITED
A.B.N. 12 063 388 821
ANNUAL FINANCIAL REPORT
30 JUNE 2018
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Antonio Torresan (Executive Director)
Colin Chenu (Non-Executive Director)
Alec Pismiris (Non-Executive Director)
COMPANY SECRETARY
Alec Pismiris
CONTENTS
Directors’ Report
PAGE
1
Statement of Profit or Loss and Other
Comprehensive Income 15
Statement of Financial Position 16
Statement of Changes in Equity 17
18
19
46
47
51
52
54
REGISTERED OFFICE AND PRINCIPAL
BUSINESS OFFICE
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Auditor’s Independence Declaration
ASX Additional Information
Corporate Governance Statement
Level 11, BGC Centre,
28 The Esplanade
Perth WA 6000
Postal Address:
Level 11, BGC Centre,
28 The Esplanade
Perth WA 6000
Telephone: (+61 8) 6424 9299
SHARE REGISTRY
Automic Registry Services
Level 2
267 St Georges Terrace
Perth, Western Australia, 6000
Investor Enquiries: 1300 288 664
AUDITOR
HLB Mann Judd
Level 4
130 Stirling Street
Perth, Western Australia, 6000
Telephone: (+61 8) 9227 7500
(+61 8) 9227 7533
Facsimile:
STOCK EXCHANGE LISTING
ASX Limited (Australian Securities Exchange)
ASX Codes: PEL
0
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Consolidated Entity consisting
of Pelican Resources Limited (“Pelican” or “the Company”) and its controlled entities for the financial year
ended 30 June 2018 (“Balance Date”), the notes to the financial statements and the auditor’s report thereon.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the date of this
report are as follows. Directors were in office for the entire period unless otherwise stated.
Colin Edward Chenu
Antonio Alessio Torresan
Alec Christopher Pismiris
PARTICULARS OF DIRECTORS
Colin Edward Chenu, B. Juris, LLB
Non-Executive Director
Mr Chenu is a graduate of the University of Western Australia, with a Bachelor of Laws, and is admitted to
practice in the Supreme Court of Western Australia and the High Court of Australia. He has practiced law in
Western Australia for more than 30 years, as both a barrister and solicitor, in a wide range of commercial,
litigious and non litigious work. Mr Chenu has gained extensive experience in the law of corporations, trade
practices, contracts, equity and trusts and tort. He is a director and principal at Perth law practice Bennett +
Co.
Other current directorships: HotCopper Holdings Limited.
Former directorships (last 3 years): None
Antonio Alessio Torresan
Executive Director
Mr Torresan is a businessman with significant experience in capital markets. Mr Torresan has been actively
involved in arranging capital raisings for ASX listed companies as well as unlisted public companies, providing
investor relation services and assisting boards with development of strategic plans. Mr Torresan has held
numerous executive positions where his responsibilities have included strategy, operational management and
business development.
Other current directorships: None
Former directorships (last 3 years): None
1
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
PARTICULARS OF DIRECTORS (CONTINUED)
Alec Pismiris, B.Comm, MAICD, FGIA FCIS
Non-Executive Director
Mr Pismiris is currently a director and company secretary for several ASX listed companies as well as a number
of unlisted public and private companies. Mr Pismiris was recently appointed a director of Pacton Gold Inc., a
company listed on the TSX Venture Exchange, where he is engaged as Interim President and Chief Executive
Officer. Mr Pismiris completed a Bachelor of Commerce degree at the University of Western Australia, is a
member of the Australian Institute of Company Directors and a Fellow of The Governance Institute of
Australia. Mr Pismiris has over 30 years’ experience in the securities, finance and mining industries and has
participated numerous times in the processes by which boards have assessed the acquisition and financing of
a diverse range of assets and has participated in and become familiar with the range of evaluation criteria used
and the due diligence processes commonly adopted in the commercial assessment of corporate opportunities.
Other current directorships: Agrimin Limited, Aguia Resources Limited, HotCopper Holdings Limited and
Pacton Gold Inc.
Former directorships (last 3 years): Cardinal Resources Limited and Impression Healthcare Limited.
COMPANY SECRETARY
Alec Pismiris, B.Comm, MAICD, FGIA FCIS
Mr Pismiris has over 30 years’ experience in the securities, finance and mining industries and has held a
number of company secretary positions secretary for various ASX listed companies as well as a number of
unlisted public and private companies over the years.
DIRECTORS’ MEETINGS
The following table sets out the number of meetings of the Company’s directors, including directors’ resolutions,
held during the year ended 30 June 2018 by each director:
Antonio Torresan
Colin Chenu
Alec Pismiris
PRINCIPAL ACTIVITIES
Number
Eligible to Attend
3
3
3
Number
Attended
3
3
3
The principal activities of the Consolidated Entity during the course of the financial year were the evaluation
of its existing exploration projects, completion of the sale of the Cockatoo Island Project, progressing the sale
of the Company’s interest in Sibuyan Nickel Properties Development Corporation and the continued search
for new opportunities in the resources sector which could demonstrate capacity to add long term shareholder
value.
2
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW
The Company made a profit after tax of $3,221,041 for the year ended 30 June 2018 (2017: $455,250 loss).
REPUBLIC OF THE PHILIPPINES
SALE OF SIBUYAN NICKEL PROPERTIES DEVELOPMENT CORPORATION
On 25 June 2015, the Company announced that it had concluded negotiations for the sale of Sibuyan Nickel
Properties Development Corporation (“SNPDC”), the beneficial owner of the Romblon Project located on
Sibuyan Island in the Romblon Province in the Philippines and entered into a Memorandum of Understanding
(“MOU”) with Dynamo Atlantic Limited, a BVI registered company (“Dynamo”).
Under the terms of the MOU, Dynamo agreed to purchase SNPDC for a purchase price of $A4.70 million
(“Consideration”) payable in cash as follows:
‐
an initial payment of $A470,000 as a non-refundable deposit which was received by the Company on
signing of the MOU;
a second payment of $A940,000 was received by the Company on Dynamo completing technical, legal
and financial due diligence investigations; and
on completion of sale and transfer of 100% ownership of SNPDC, a final payment of $A3,290,000.
‐
‐
Dynamo further agreed to grant a 2.5% royalty on net income generated by SNPDC from any operations
undertaken on Sibuyan Island.
In August 2016 Pelican secured the support of its venture partner, All Acacia Resources Inc. (“AARI”) for the
sale and transfer of 100% ownership of SNPDC and subsequently notified Dynamo that it considered the MOU
unconditional and the parties could proceed towards completion.
Following confirmation of AARI’s support for the sale and transfer of 100% ownership of SNPDC, Dynamo
advised Pelican that it did not wish to proceed with the purchase of SNPDC and requested a full refund of the
purchase price paid under the MOU. Following several unsuccessful attempts to progress to completion,
Pelican issued Dynamo with a Notice of Default (“Notice”) on 30 December 2016, whereby Dynamo had 28
days to remedy the default by confirming that it is ready, willing and able to complete the sale of SNPDC in
accordance with the terms of the MOU.
During the December 2016 quarter, Pelican secured shareholder approval for the sale of its interest in SNPDC
pursuant to the Listing Rule 11.2 at its annual general meeting.
During the March 2017 quarter, Gina Lopez, the Secretary of the Department of Environment and Natural
Resources (“DENR”), ordered the cancellation of 75 Mineral Production Sharing Agreements in an intensified
government crackdown on mines deemed destructive to watershed forest reserves.
The DENR published a list of Mineral Production Sharing Agreements that it proposed to cancel, which
included reference to Romblon, Altai Philippines Mining Corp (“Altai”) – Sibuyan Island. The Romblon
project is still in the process of being transferred from Altai, the original applicant of MPSA 3042009-IVB
(“MPSA”), to SNPDC. Neither SNPDC or Altai have been issued with any formal notification from the DENR
of the proposed cancellation of MPSA 3042009-IVB.
3
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Dynamo relied on uncertainty surrounding the status of the MPSA to delay both remedying the Notice issued
on 30 December 2016 and the transaction by seeking clarification from Pelican on the status of both SNPDC
and MPSA.
Pelican responded to Dynamo confirming that neither SNPDC or Altai had received any notice of the
cancellation of the MPSA, or any notice to show cause why the MPSA should not be cancelled. Following
enquiries undertaken by SNPDC, Dynamo was further advised the MPSA is not located in a designated
watershed zone. The watershed zone on Sibuyan Island is associated with the Mount Guiting-Guiting Natural
Park, comprising approximately 157 square kilometres of Sibuyan’s total area of 445 square kilometres. The
watershed area is at a high altitude, whilst the MPSA is located in lowlands near the coast.
On 3 May 2017 a panel of the Commission on Appointments rejected the appointment of Gina Lopez as
Secretary Department of Environment and Natural Resources due to her controversial policies which further
removed the uncertainty surrounding the status of MPSA .
Throughout the financial year, Dynamo continued its legal review of the Share Sale and Assignment of Debt
Agreement (“SSADA”). Pelican and Dynamo also sought advice on the regulatory requirements to achieve
completion, including submission of the signed SSADA with the Philippines Bureau of Internal Revenue
(“BIR”) for review and assessment of taxation obligations arising from the sale of SNPDC. Once an assessment
of tax has been issued and the BIR is satisfied the taxation obligations pursuant to the sale of SNPDC are
settled, the BIR will issue a Certificate Authorizing Registration and Tax Clearance. These documents issued
by the BIR are required to transfer ownership of SNPDC to Dynamo.
As previously reported, Pelican has offered to consider varying certain terms of the MOU with Dynamo to
conclude the transaction. On confirmation of Dynamo’s acceptance of the terms of the SSADA which includes
the variation of certain terms of the MOU, Pelican will make the appropriate announcement to ASX. Any
variation to the terms of the MOU will require shareholder approval in accordance with the requirements of
Listing Rule 11.2.
If Dynamo does not agree with the terms of the SSADA, then the terms of the MOU will remain in force and
Pelican will seek legal advice on its position.
Pelican continues to work toward having the settlement completed expeditiously and have sought confirmation
of Dynamo’s acceptance of the terms of the SSADA so the matter can proceed to settlement.
ROMBLON PROJECT, SIBUYAN ISLAND, ROMBLON PROVINCE
(MPSA No. 3042009-IVB)
Interest:
MPSA 3042009-IVB
The Romblon Project, on Sibuyan Island in the Romblon Province in the Philippines, is being evaluated as
a source of direct shipping lateritic nickel ore (DSO). The nickel resource explored by two Japanese nickel
companies in 1972 is covered by a Mineral Production Sharing Agreement (MPSA). The project is still in
the process of being evaluated and also transferred from Altai Resources Philippines Inc. (Altai), the original
applicant of the MPSA, to SNPDC.
4
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Further exploration is required to fully evaluate the laterite nickel resource but the project is currently on
care and maintenance due to a Cease and Desist Order (CDO) issued in September 2011 by the Mines and
Geosciences Bureau (MGB) of the Department of Environment and Natural Resources (DENR). Counsel
for SNPDC is pursuing all legal avenues with respect to the appeal to the MGB and DENR to lift the CDO.
During the financial year, no project development field work was undertaken due to the CDO and to
minimize expenses in the Philippines.
WESTERN AUSTRALIA
KIMBERLEYS
COCKATOO ISLAND PROJECT (M04/235)
The Company entered into a conditional legally binding term sheet and formal agreement (“Agreement”) with
Cockatoo Iron NL (“Cockatoo Iron”) and its wholly owned subsidiary Pearl Gull Pty Ltd (“Pearl Gull”), to
sell its interests in the Cockatoo Island Project on 13 September 2017. The Agreement encompassed mining
lease 04/235-I, miscellaneous licence applications 04/102 and 04/103 and certain contractual rights to use the
Ship Loader and Jetty located within the mining lease (“Cockatoo Island Assets”).
5
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Under the terms of the Agreement, Pelican agreed to sell its interests in the Cockatoo Island assets for a
purchase price of $3.75 million (“Consideration”) payable in cash and equity in Cockatoo Iron as follows:
‐
‐
an initial cash payment of $150,000 non-refundable deposit that was paid on execution of the Agreement;
a second cash payment of $1,350,000 on completion of the sale and/or transfer of the Mining Lease and
Use Rights (“Completion”);
a third cash payment of $750,000 on or before 31 March 2018 which was extended to 30 April 2018 by
mutual agreement; and
the issuance of $1,500,000 worth of fully paid ordinary shares in Cockatoo Iron, at a deemed issue price
of either $0.30 per share or if Cockatoo Iron completes a capital raising by the issue of fully paid ordinary
shares before Completion as part of a public listing on ASX, the issue price for those shares (subject to
such escrow restrictions as may be imposed by ASX).
‐
‐
Pelican and Cockatoo Iron have also executed a Revenue Sharing Agreement (“RSA”), whereby Pelican will
be entitled to receive up to a maximum of $500,000 per annum of gross revenue received by Cockatoo Iron
and Pearl Gull from certain non-mining activities that may be conducted by third parties within the tenements.
Cockatoo Iron will have the right of pre-emption in respect of a sale by Pelican of its rights under the RSA.
On 1 May 2018, the Company completed the sale of its interests in the Cockatoo Island Project.
Following completion of the sale of its interests in the Cockatoo Island Project, ASX advised Pelican, the sale
constituted the disposal of the Company’s main undertaking, in accordance with Guidance Note 12. The
Company lodged a submission with ASX, arguing unsuccessfully the Cockatoo Island Project was not the
Company’s main undertaking. As a consequence of this ASX has afforded the Company six months from 30
April 2018 to demonstrate the Company is in compliance with listing rule 12.1. If the Company does not
demonstrate compliance with listing rule 12.1 to the ASX’s satisfaction by the close of business on 30 October
2018, ASX may suspend the Company’s securities from official quotation.
APPLICATIONS/RELINQUISHMENTS
Pelican transferred its interest in M04/235-I, L04/102 and L04/103 to Pearl Gull Pty Ltd in accordance with
the completion of the sale of Pelican’s interest in the Cockatoo Island Project.
6
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the reporting period, the Company continued a review of its existing projects with an objective of
rationalising those projects. The Company continued efforts to complete the sale of 100% ownership of
Sibuyan Nickel Properties Development Corporation (“SNPDC”), the beneficial owner of the Romblon Project
located on Sibuyan Island in the Romblon Province in the Philippines for a price of $A4.70 million.
On 1 May 2018, the Company completed the sale of its interests in the Cockatoo Island Project for $3.75
million represented as $2.25 million cash and 5,000,000 fully paid ordinary shares at a deemed issue price of
$0.30 per share in Cockatoo Iron NL. The parties have also executed a revenue sharing agreement whereby
the Company will be entitled to receive up to a maximum of $500,000 per annum from certain non-mining
activities that may be conducted by third parties within the mining lease.
Pelican continued to search for new opportunities in the resources sector which could demonstrate capacity to
add long term shareholder value. The directors believe that existing cash reserves combined with funds
received from the sale of its interest in Sibuyan Nickel Properties Development Corporation leave the
Company well positioned to fund new opportunities in the resources sector.
DIVIDENDS
No dividends were paid or recommended for the year ended 30 June 2018.
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen subsequent to the balance date which would significantly affect the
operations of the Company, its operating results or its state of affair in the subsequent financial years.
SHARE OPTIONS
The Company has the following securities on issue as at the date of the Directors’ Report.
Security Description
Fully paid shares
Options exercisable at $0.01 expiring 30 June 2019
Options exercisable at $0.02 expiring 31 December 2019
Number of
Securities
361,923,540
50,000,000
35,000,000
Unissued shares
As at the date of this report, there were 85,000,000 unissued ordinary shares under options (30 June 2017:
85,000,000).
Option holders do not have any right, by virtue of the options, to participate in any share issue of the Company
or any related body corporate.
Shares issued as a result of the exercise of options
During the financial year there were no ordinary shares issued as a result of the exercise of options (2017: Nil).
As at the date of this report there has been no ordinary shares issued since the Balance Date on the exercise of
options.
7
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group will continue to focus on maximising value from the current portfolio of mining projects and will
continue its search for further opportunities. Given that the nature of the Group’s activities is exploration
focused, no further information can be provided as to likely developments as such developments will depend
on exploration success at the Group’s various project interests, and the nature of any new acquisitions going
forward.
ENVIRONMENTAL REGULATION
The Consolidated Entity has assessed whether there are any particular or significant environmental regulations
which apply. It has determined that the risk of non-compliance is low, and has not identified any compliance
breaches during the year.
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS OF THE COMPANY
At the date of this report, the directors’ interests in shares and options of Pelican Resources Limited were:
Number of Ordinary Number of Options
Shares
over Ordinary Shares
Antonio Torresan
Colin Chenu
Alec Pismiris
59,193,981
Nil
12,000,000
28,735,896
2,000,000
13,500,000
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behavior and accountability, the directors of
Pelican Resources Limited support and have substantially adhered to the best practice recommendations set
by the ASX Corporate Governance Council. The Company’s corporate governance statement is contained in
the annual report.
INDEMNIFICATION AND INSURANCE OF DIRECTORS
The Company has, during or since the financial year, in respect of any person who is or has been an officer of
the Company or a related body corporate:
-
-
indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer,
including costs and expenses in successfully defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an
officer for the costs or expenses to defend legal proceedings.
8
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
Insurance of Officers
Since the end of the previous financial year, the Company has paid insurance premiums in respect of directors
and officers liability and corporate reimbursement, for directors and officers of the Company. The insurance
premiums relate to:
-
-
any loss for which the directors and officers may not be legally indemnified by the Company arising
out of any claim, by reason of any wrongful act committed by them in their capacity as a director or
officer, first made against them jointly or severally during the period of insurance; and
indemnifying the Company against any payment which it has made and was legally permitted to make
arising out of any claim, by reason of any wrongful act, committed by any director or officer in their
capacity as a director or officer, first made against the director or officer during the period of insurance.
The insurance policy outlined above does not allocate the premium paid to each individual officer of the
Company and does not allow disclosure of the premium.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act
2001 is set out on page 58.
NON-AUDIT SERVICES
HLB Mann Judd has not provided any non-audit services to the entity as shown at Note 16.
9
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and executives of the Company.
Remuneration policy
The remuneration policy of Pelican Resources Limited has been designed to align director and executive
objectives with shareholder and business objectives by providing a fixed remuneration component and offering
specific long-term incentives based on key performance areas affecting the Consolidated Entity’s ability to
attract and retain the best executives and directors to run and manage the Consolidated Entity.
The Board’s policy for determining the nature and amount of remuneration for board members and senior
executives of the Consolidated Entity is as follows:
The remuneration policy setting out the terms and conditions for the executive directors and other senior
executives was developed by the Board.
Executive remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relevant comparative information and independent expert
advice.
As well as a base salary, remuneration packages include superannuation, retirement and termination
entitlements, performance-related bonuses and fringe benefits.
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing
the Company’s diverse operations.
Remuneration and other terms of employment for the executive director and certain other senior executives
have been formalised in service agreements as follows:
The Company has entered into an executive service agreement with executive director, Mr Antonio Torresan.
The terms of the service agreement are set out as follows:
- Commencement date: 24 March 2015
- Term: one year with a one year extension at the sole discretion of the Board
- Fixed remuneration: $120,000 per annum
- Termination for cause: no notice period
- Termination without cause: three month notice period
The Company has entered into an agreement with non-executive director, Mr Alec Pismiris. The terms of the
agreement are set out as follows:
- Commencement date: 24 March 2015
- Term: no fixed
- Fixed remuneration: $36,000 per annum
- Termination for cause: no notice period
- Termination without cause: no notice period
10
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Remuneration policy (continued)
The Company has entered into an agreement with non-executive director, Mr Colin Chenu. The terms of the
agreement are set out as follows:
- Commencement date: 29 June 2015
- Term: no fixed
- Fixed remuneration: $36,000 per annum
- Termination for cause: no notice period
- Termination without cause: no notice period
Remuneration of non-executive directors is determined by the Board within the maximum amount approved
by the shareholders from time to time and which currently stands at $250,000 per annum.
The Board undertakes an annual review of its performance against goals set at the start of the year. The Board
may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to
attract the highest calibre of executives and reward them for performance that results in long-term growth in
shareholder wealth.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
Performance-based remuneration
The Company currently has no performance-based remuneration component built into director and executive
remuneration packages.
During the current financial year, in recognition of the value generated by the successful negotiation and
completion of the sale of the Company’s interests in the Cockatoo Island Project, the board of Pelican approved
payment of a short-term incentive comprised of a cash bonus of $105,000 paid to directors of the Company.
The Company received 100% “yes” votes on its remuneration report for the 30 June 2017 financial year.
11
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Key management personnel compensation
Details of the nature and amount of emolument paid for each director and executive of Pelican Resources
Limited are set out below:
Primary Benefits
Post Employment
Salary
& Fees
Cash
Bonus Monetary
Non-
Super-
annuation
Retirement
Benefits
$
$
$
$
Directors
A Torresan - Executive Director
2018 120,000
2017 120,000
50,000
-
C Chenu - Non-Executive Director
2018
2017
36,000
36,000
5,000
-
A Pismiris - Non-Executive Director
2018
2017
72,0001
72,0001
50,000
-
Total Remuneration:
2018 228,000 105,000
2017 228,000
-
-
-
-
-
-
-
-
-
Notes:
(1) Includes $36,000 paid as fees for company secretarial services
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share
Based
Payments
Shares/Opti
ons
$
-
-
-
-
-
-
-
-
Other
TOTAL
Benefits
Perform
ance
Based
$
-
-
-
-
-
-
-
-
$
%
170,000
120,000
41,000
36,000
122,000
72,000
333,000
228,000
29
-
12
-
41
-
32
-
Other related party transactions of key management personnel are disclosed in Note 15.
Remuneration Options
During the year ended 30 June 2018, no options were issued as part of director remuneration (30 June 2017:
Nil).
During the year ended 30 June 2018, no remuneration options were forfeited, expired or exercised by the
directors.
12
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Shareholdings by Directors
2018
Balance
01/07/17
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/18
(No. of Shares)
A Torresan
C Chenu
A Pismiris
Total
2017
A Torresan
C Chenu
A Pismiris
Total
59,193,981
-
12,000,000
71,193,981
-
-
-
-
-
-
-
-
-
-
-
-
59,193,981
-
12,000,000
71,193,981
Balance
01/07/16
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/17
(No. of Shares)
59,193,981
-
12,000,000
71,193,981
-
-
-
-
-
-
-
-
-
-
-
-
59,193,981
-
12,000,000
71,193,981
Options Holdings by Directors
2018
A Torresan
C Chenu
A Pismiris
Total
2017
Balance
01/07/17
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/18
(No. Options)
28,735,896
2,000,000
13,500,000
44,235,896
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28,735,896
2,000,000
13,500,000
44,235,896
Balance
01/07/16
(No. Options)
Granted as
Remuneration
(No. Options)
No. of
Options
Acquired
No. of
Options
Exercised
Net
Change Other
(No. Options)
Balance
30/06/17
(No. Options)
A Torresan
C Chenu
A Pismiris
Total
(1) Expired on 30/06/17
38,143,563
2,000,000
13,500,000
53,643,563
End of remuneration report (audited).
-
-
-
-
-
-
-
-
-
-
-
-
(9,407,667)(1)
-
-
-
28,735,896
2,000,000
13,500,000
44,235,896
13
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ REPORT (CONTINUED)
Signed in accordance with a resolution of the board of directors.
Dated at Perth this 28th day of September, 2018
_______________________
Alec Pismiris
Director
14
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Other income
Corporate
Exploration expenditure written-off
Share-based payments
Other expenses
Profit/(Loss) before income tax
Income tax
Profit/(Loss) for the year
Other comprehensive income/(loss)
Item that may be classified to profit or loss:
Currency translation differences
Other comprehensive income/(loss) for the year
Consolidated
Note
2018
$
2017
$
2
3
24
3,881,655
21,106
(566,486)
(1,680)
(6,541)
(384)
(428,675)
(14,732)
(31,394)
(1,555)
3,306,564
(455,250)
4
(85,523)
-
3,221,041
(455,250)
(6,772)
(59,233)
(6,772)
(59,233)
Total comprehensive income/(loss) for the year
3,214,269
(514,483)
Profit/(Loss) attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive profit/(loss) attributable to:
Members of the parent entity
Non-controlling interest
3,225,509
(4,468)
3,221,041
(448,586)
(6,664)
(455,250)
3,214,056
213
3,214,269
(493,523)
(20,960)
(514,483)
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
18
18
0.89
0.83
(0.12)
(0.12)
The above consolidated statement of profit or loss and other comprehensive income
should be read in conjunction with the accompanying notes.
15
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Current Assets
Cash and cash equivalents
Restricted cash
Security deposits
Trade and other receivables
Other current assets
Assets held for sale
Total Current Assets
Non-Current Assets
Other financial assets
Mineral exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Deferred revenue
Liabilities associated with assets held for sale
Tax payable
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interest
Total Equity
Consolidated
Note
2018
$
2017
$
5
11
6
7
26
8
9
10
11
26
4
2,127,459
940,000
114,000
18,794
21,941
2,175,081
445,755
940,000
114,000
20,916
20,256
2,202,654
5,397,275
3,743,581
1,500,000
-
1,500,000
-
-
-
6,897,275
3,743,581
87,217
1,410,000
1,098,737
85,523
219,130
1,410,000
1,119,463
-
2,681,477
2,748,593
2,681,477
2,748,593
4,215,797
994,988
12
13
13,630,120
2,003,125
13,630,120
2,008,037
(10,580,155) (13,805,664)
5,138,613
(837,292)
1,832,493
(837,505)
4,215,797
994,988
The above consolidated statement of financial position
should be read in conjunction with the accompanying notes.
16
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Issued
Capital
Options
Reserve
Consolidated
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Non-
Controlling
Interest
Total
Equity
$
$
$
Balance at 01/07/2016
Total comprehensive income
for the year
Loss for the year
Other comprehensive income
Foreign currency translation
differences
Total comprehensive income / (loss)
for the year
Transactions with owners
recorded directly into equity
Share-based payments
13,630,120
1,899,148
122,432
(13,357,078)
(816,545)
1,478,077
-
-
-
-
-
-
-
-
(448,586)
(6,664)
(455,250)
(44,937)
-
(14,296)
(59,233)
(44,937)
(448,586)
(20,960)
(514,483)
31,394
-
-
-
31,394
Balance at 30/06/2017
13,630,120
1,930,542
77,495
(13,805,664)
(837,505)
994,988
Balance at 01/07/2017
Total comprehensive income
for the year
Profit/(Loss) for the year
Other comprehensive income
Foreign currency translation
differences
Total comprehensive income / (loss)
for the year
Transactions with owners
recorded directly into equity
Share-based payments
13,630,120
1,930,542
77,495
(13,805,664)
(837,505)
994,988
-
-
-
-
-
-
-
-
3,225,509
(4,468)
3,221,041
(11,453)
-
4,681
(6,772)
(11,453)
3,225,509
213
3,214,269
6,541
-
-
-
6,541
Balance at 30/06/2018
13,630,120
1,937,083
66,042
(10,580,155)
(837,292)
4,215,798
The above consolidated statement of changes in equity
should be read in conjunction with the accompanying notes.
17
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Royalties received
Consolidated
Note
2018
$
2017
$
(585,591)
18,975
-
(488,062)
20,965
-
Net Cash Used in Operating Activities
14(b)
(566,616)
(467,097)
Cash Flows from Investing Activities
Payments for exploration expenditure
Proceeds from sale of project
Release of security deposit
Net Cash Provided by Investing Activities
(1,680)
2,250,000
-
(14,732)
-
17,000
2,248,320
2,268
Net increase / (decrease) in cash and cash equivalents held
1,681,704
(464,829)
Cash and cash equivalents at the beginning of the financial year
445,755
910,584
Cash and cash equivalents at the end of the financial year
14(a)
2,127,459
445,755
The above consolidated statement of cash flows
should be read in conjunction with the accompanying notes
18
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Pelican Resources Limited is a company domiciled in Australia. The consolidated financial statements of the
Company as at and for the year ended 30 June 2018 comprise the Company and its subsidiaries (referred to as
the Group or Consolidated Entity).
The significant policies, which have been adopted in the preparation of this financial report, have been applied
consistently unless otherwise stated and are as follows:
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Act 2001.
The financial report was authorised for issue by the Board on 28 September 2018.
The financial report has been prepared on an accruals basis and is based on historical costs except for certain
assets which are carried at fair value. Cost is based on the fair values of the consideration given in exchange
for assets.
For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.
(b)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
statements and notes comply with International Financial Reporting Standards (IFRS).
(c)
New and Revised Accounting Standards and Interpretations adopted by the Group
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to its operations and effective for the current year. The
adoption of all the new and revised Standards and Interpretations has not resulted in any material changes to
the Group’s accounting policies in order to comply with these amendments. The changes in accounting
policies have no effect on the amounts reported for the current or prior years.
19
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent, Pelican
Resources Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls
an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in
Note 17.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting
policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at
either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets. Subsequent
to initial recognition, non-controlling interests are attributed their share of profit or loss and each component
of other comprehensive income. Non-controlling interests are shown separately within the equity section of
the statement of financial position and statement of profit or loss and other comprehensive income.
(e)
Income Tax
The charge for current income tax is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using the rates that have been enacted or are substantively enacted by the
balance date.
Deferred tax is accounted for using the statement of financial position liability method in respect of temporary
differences arising between the tax base of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income
except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future profit will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated
Entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
20
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(f)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of
the mining permits. Such costs have been determined using estimates of future costs, current legal
requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of
site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(g)
Share Based Payments
The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the vesting and performance criteria, the impact of
dilution, the non-tradable nature of the option, the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield and risk free interest rate for the term of the option.
The fair value of the options granted excluded the impact of any non-market vesting condition (for example,
profitability and sale growth targets). Non-market vesting conditions are included in assumption about the
number of options that are expected to become exercisable. The employee benefit expense recognised each
period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to these options is
transferred to share capital.
The market value of shares issued to employees for no cash consideration under the employee share scheme is
recognised as an employee benefits expense with a corresponding increase in equity when the employees
become entitled to the shares.
21
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition, these instruments are measured
as set out below.
Controlled Entities
Investments in controlled entities are carried at cost less, where applicable, any impairment losses.
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where
unanimous decisions about relevant activities are required.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a "joint
venture" and accounted for using the equity method.
Joint venture operations represent arrangements whereby joint operators maintain direct interests in each asset
and exposure to each liability of the arrangement. The Group's interests in the assets, liabilities, revenue and
expenses of joint operations are included in the respective line items of the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties'
interests. When the Group makes purchases from a joint operation, it does not recognise its share of the gains
and losses from the joint arrangement until it resells those goods/assets to a third party.
Impairment
At each reporting date, the directors assess whether there is objective evidence that a financial instrument has
been impaired. In the case of available-for-sale financial instruments, a prolonged decline in value of the
instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in
the statement of profit or loss and other comprehensive income.
(i)
Impairment of Assets
At each reporting date, the directors review the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount
is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the directors estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
22
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may be made having regard to the characteristics of the
specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability
(ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such
a market, the most advantageous market available to the entity at the end of the reporting period (ie the market
that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability,
after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the asset in its highest and best use or to sell it to another market participant that would use the asset in its
highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no observable market price in relation to the transfer of
such financial instruments, by reference to observable market information where such instruments are held as
assets. Where this information is not available, other valuation techniques are adopted and, where significant,
are detailed in the respective note to the financial statements.
Valuation Techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more
valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation technique
that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or
liability being measured. The valuation techniques selected by the Group are consistent with one or more of
the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities;
Income approach: valuation techniques that convert estimated future cash flows or income and expenses
into a single discounted present value; and
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
23
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
Valuation Techniques (continued)Each valuation technique requires inputs that reflect the assumptions that
buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When
selecting a valuation technique, the Group gives priority to those techniques that maximise the use of
observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data
(such as publicly available information on actual transactions) and reflect the assumptions that buyers and
sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for
which market data is not available and therefore are developed using the best information available about such
assumptions are considered unobservable.
Fair Value Hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that an input
that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable
market data. If all significant inputs required to measure fair value are observable, the asset or liability is
included in Level 2. If one or more significant inputs are not based on observable market data, the asset or
liability is included in Level 3.
24
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Fair Value of Assets and Liabilities (continued)
Fair Value Hierarchy (continued)The Group would change the categorisation within the fair value hierarchy
only in the following circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice
versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice
versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value
hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change
in circumstances occurred.
(k)
Investments in Associates
Investments in associate companies are recognised in the financial statements by applying the equity method
of accounting where significant influence is exercised over an investee. Significant influence exists where the
investor has the power to participate in the financial and operating policy decisions of the investees but does
not have control or joint control over those policies. The equity method of accounting recognises the
Consolidated Entity’s share of post-acquisition reserves of its associates.
(l)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Consolidated Entity’s entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial statements are
presented in Australian dollars which is the parent entity’s functional and presentation currency. All figures
presented in the financial report have been rounded to the nearest dollar.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the
date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-
monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair
values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or
loss and other comprehensive income, except where deferred in equity as a qualifying cash flow or net
investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in
the statement of profit or loss and other comprehensive income.
25
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Foreign Currency Transactions and Balances (continued)Controlled entities
The financial results and position of foreign operations whose functional currency is different from the
Consolidated Entity’s presentation currency are translated as follows:
Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period.
Exchange differences arising on translation of foreign operations are transferred directly to the Consolidated
Entity’s foreign currency translation reserve in the statement of financial position. These differences are
recognised in the statement of profit or loss and other comprehensive income in the period in which the
operation is disposed. The functional currency of the subsidiaries incorporated in the Philippines (refer Note
17) is the Philippine PESO.
(m)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, net of outstanding bank overdrafts.
(n)
Revenue
Revenue from the sale of goods is recognised upon the delivery of goods to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
Royalty revenue is recognised on an accruals basis based on tonnages shipped.
All revenue is stated net of the amount of goods and service tax (GST).
(o)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances, the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
26
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p)
Earnings/(Loss) per share
(i) Basic Earnings/(Loss) per share
Basic earnings/(loss) per share is determined by dividing the operating profit/(loss) after income tax
attributable to members of Pelican Resources Limited by the weighted average number of ordinary
shares outstanding during the financial year.
(ii) Diluted Earnings/(Loss) per share
Diluted earnings/(loss) per share adjusts the amounts used in the determination of basic earnings/(loss)
per share by taking into account unpaid amounts on ordinary shares and any reduction in earnings per
share that will probably arise from the exercise of options outstanding during the financial year.
(q)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of
the share proceeds received.
(r)
Adoption of new and revised standards
Standards and Interpretations issued not yet adopted
The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the year ended
30 June 2018. As a result of this review the Directors have determined that there is no material impact of the
Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary
to Group accounting policies.
(s) Critical Accounting Estimates and Judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. The directors evaluate estimates and judgments incorporated into the financial statements based on
historical knowledge and best available current information. Estimates assume a reasonable expectation of
future events and are based on current trends and economic data, obtained both externally and within the
Consolidated Entity. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes:
Note 4 - Income Tax
Note 6 - Trade and Other Receivables
Note 9 - Mineral Exploration and Evaluation Expenditure
Note 21 - Risk Management Objectives and Policies
Note 24 - Share Based Payments
27
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 2: OTHER INCOME
Interest earned
Gain on sale of exploration project
Other
Total
Consolidated
2018
$
18,975
3,862,680
-
3,881,655
2017
$
20,965
-
141
21,106
NOTE 3: EXPENSES AND GAINS/(LOSSES)
Significant Items
Loss before income tax includes the following expenses whose disclosure is relevant in explaining the
financial performance of the consolidated entity:
Included in corporate expenses
Accounting and administration fees
Consulting
NOTE 4: INCOME TAX
The prima facie tax on loss before income tax
is reconciled to the income tax as follows:
Profit/(Loss) before income tax
Income tax calculated at 27.5% (2017: 27.5%)
Add back:
Provisions
Capitalised exploration written off
Capital raising costs
Share based payment
Foreign losses movement
Future income tax (charge)/benefits not brought to account
Income tax expense
Deferred tax assets:
Capital raising costs
Provisions
Carried forward tax losses (including foreign tax losses)
Deferred tax liabilities:
Capitalised exploration costs
28
90,888
321,541
86,122
42,244
Consolidated
2018
$
2017
$
3,306,564
(455,250)
909,305
(125,194)
413
462
(4,763)
(1,799)
247,955
(825)
4,051
(18,254)
(8,633)
2,863
(1,066,049)
145,992
85,523
-
239
4,538
1,365,369
239
258,180
2,431,418
1,370,146
2,689,837
(596,156)
(596,156)
(565,247)
(565,247)
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 4: INCOME TAX (continued)
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be
available against which the Group can utilise the benefits thereof.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Accrued royalties
Doubtful debt provision
Goods and services tax
NOTE 7: OTHER CURRENT ASSETS
Prepayments
NOTE 8: OTHER FINANCIAL ASSETS
Non Current
Unlisted investments at fair value:
Shares in other entities(i) (available for sale)
2,127,459
445,755
2,127,459
445,755
Consolidated
2018
$
2017
$
-
-
18,794
18,794
923,838
(923,838)
20,916
20,916
21,941
21,941
20,256
20,256
1,500,000
1,500,000
-
-
(i) As at 30 June 2018, the Company held 5,000,000 shares in Cockatoo Iron NL as a result of the sale of the
Cockatoo Island Project.
29
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 9: MINERAL EXPLORATION AND
EVALUATION EXPENDITURE
Balance at beginning of year
Exploration and mining expenditure incurred during the year
Expenditure written off
Balance at end of year
Exploration expenditure carried forward in respect
of areas of interest in the exploration and evaluation phase
Consolidated
2018
$
2017
$
-
1,680
(1,680)
-
14,732
(14,732)
-
-
-
-
The value of the exploration tenements carried forward is dependent upon:
(a) The continuance of the Consolidated Entity’s rights to tenure of the area of interest;
(b) The results of future exploration; and
(c) The recoupment of costs through successful development and exploitation of the areas of interest or alternatively
by their sale.
The carrying value of the exploration expenditure as at 30 June 2018 is disclosed at note 26 and relates to the
Romblon Project which is subject to a cease and desist order. The Company has entered into a Memorandum of
Understanding for the sale of the Romblon project for $4.7 million which exceeds the carrying value at 30 June 2018.
(refer to the Directors’ Report - Review of Operations for further details).
NOTE 10: TRADE AND OTHER PAYABLES
Trade payables and accrued expenses
Goods and services tax
Advances/loans – other parties
NOTE 11: DEFERRED REVENUE
Deposit on sale of subsidiary
Consolidated
2018
$
85,938
-
1,279
2017
$
86,330
131,521
1,279
87,217
219,130
Consolidated
2018
$
2017
$
1,410,000
1,410,000
On 25 June 2015, the Company entered into a Memorandum of Understanding with Dynamo Atlantic Limited, a BVI
registered company to sell 100% ownership of Sibuyan Nickel Properties Development Corporation and received an
initial payment of $470,000 and a subsequent payment of $940,000 on completion of due diligence representing 30%
of the purchase price agreed of $4.70 million. A portion of the purchase price is owed to the Company’s joint venture
partner All-Acacia Resources Limited. As the sale has not completed, the Company has deferred this revenue and
will recognise the full proceeds upon completion of the sale.
30
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 12: ISSUED CAPITAL
(a) Issued Capital
361,923,540 Ordinary shares fully paid (2017: 361,923,540)
13,630,120
13,630,120
(b) Movements in ordinary share capital of the Company:
Consolidated
2017
$
2017
$
Date
Details
01/07/2016
Opening balance
30/06/2017
Closing balance
01/07/2017
Opening balance
30/06/2018
Closing balance
(c) Capital Risk Management
No. of Shares
Issue Price
$
361,923,540
361,923,540
361,923,540
361,923,540
13,630,120
13,630,120
13,630,120
13,630,120
When managing capital, management’s objective is to ensure the Company continues as a going concern as
well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims
to maintain a capital structure that ensures the lowest cost of capital available to the Company.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The Company does not have a defined share buy-back plan.
No dividends were paid in 2017 and no dividends will be paid in 2018.
There is no current intention to incur further debt funding on behalf of the Company as on-going expenditure
will be funded via cash reserves or equity.
The Company is not subject to any externally imposed capital requirements.
31
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 13: RESERVES
(a) Composition
Share based payments reserve
Foreign currency translation reserve
Consolidated
2018
$
2017
$
1,937,083
66,042
1,930,542
77,495
2,003,125
2,008,037
(b) Movements in options and performance rights on issue during the last two years were as follows:
Date
Details
No. of
Listed
Options
No. of
Unlisted
Options
Fair Value
of Options and
Performance Rights
Issued
Exercise
Price
Expiry
Date
01/07/2016 Opening balance
30/06/2017 Expired
59,725,571
(59,725,571)
85,000,000
-
$1,899,148
N/A
$0.02 30/06/2017
30/06/2017 Closing balance
-
85,000,000
$1,899,148
Date
Details
No. of
Unlisted
Options
Fair Value
of Options and
Performance Rights
Issued
01/07/2017 Opening balance
85,000,000
$1,899,148
30/06/2018 Closing balance
85,000,000
$1,899,148
(c) Nature and Purpose of Reserves
Share based payment reserve
The share based payments reserve is the value of equity benefits provided to directors, employees and
consultants by the Company as part of their remuneration.
Foreign currency translation reserve
The foreign currency translation reserve represents the foreign exchange gain/loss on the translation of the
subsidiaries from their functional current to the presentation currency.
32
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 14: NOTES TO THE STATEMENT OF CASH FLOWS
a) Cash and cash equivalents at the end of the financial year as shown in the
Statement of Cash Flows is reconciled to items in the Statement of Financial
Position as follows:
Consolidated
2018
$
2017
$
Cash and cash equivalents (Note 5)
2,127,459
445,755
b) Reconciliation of net cash and cash equivalents used in operating activities
To profit/(loss) for the year:
Profit/(Loss) for the year
Exploration and evaluation expenditure written off / impaired
Gain on sale of exploration project
Share based payment expense
Movements in assets and liabilities:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other assets
Increase/(Decrease) in trade and other payables
Net cash used in operating activities
3,221,041
(455,250)
1,680
(3,862,680)
6,541
14,732
-
31,394
2,123
(1,685)
66,364
(201)
(20,256)
(37,516)
(566,616)
(467,097)
c) Non-cash investing and financing activities
2018
Other than share-based payment transactions disclosed in note 24, there were no non-cash investing and financing
activities during the year ended 30 June 2018.
2017
Other than share-based payment transactions disclosed in note 24, there were no non-cash investing and financing
activities during the year ended 30 June 2017.
33
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 15: KEY MANAGEMENT PERSONNEL
This note is to be read in conjunction with the Remuneration Report which is included in the Directors’ Report.
(a) Compensation of Key Management Personnel
Consolidated
Compensation by category:
Short-term
Post employment
Termination benefit
Share based payment
2018
$
333,000
-
-
-
2017
$
228,000
-
-
-
333,000
228,000
(b) Transactions with Key Management Personnel
Colin Chenu was a Principal of Lawfirst Pty Ltd (t/a Bennett + Co law firm) which provided legal services to the
Group.
Aggregate amount of each type of transaction with directors and their director related entities were as follows:
Legal services
Consolidated
2018
$
53,809
2017
$
46,986
Amounts payable or receivable to directors and their director related party entities at balance date arising from these
transactions was $810 (2017: $30,954).
NOTE 16: REMUNERATION OF AUDITORS
Audit services – HLB Mann Judd
– Overseas auditors
Consolidated
2018
$
25,200
500
25,700
2017
$
24,250
541
24,791
34
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 17: INTEREST IN SUBSIDIARIES
(a)
Information about Principal Subsidiaries
The consolidated financial statements include the financial statements of Pelican Resources Limited and the
subsidiaries listed in the following table:
Country
of
Incorporation
Equity Interest
2018
%
2017
%
Sunrise Exploration Pty Ltd
Sunshine Gold Pty Ltd
Pelican Pacific Pty Ltd
Sunpacific Resources Philippines, Inc.
Sunrom Philippines Holdings Corp’n.
Sibuyan Nickel Properties Dev. Corp’n.
AUS
AUS
AUS
PHP
PHP
PHP
100
100
-*
100
100
75
100
100
100
100
100
75
*On 3 December 2017, Pelican Pacific Pty Ltd was deregistered.
35
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 17: INTEREST IN SUBSIDIARIES (continued)
(b)
Summarised Financial Information of Subsidiaries with Material Non-Controlling Interests
Set out below is the summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group.
Summarised Financial Position
Current Assets
Non-Current Assets
Current Liabilities
Non-Current Liabilities
Net Liabilities
Carrying amount of non-controlling interest
Summarised Financial Performance
Revenue
Loss before income tax
Income tax
Post-tax loss
Other Comprehensive Income
Total Comprehensive Loss
The information above is the amount before intercompany eliminations.
Loss attributable to non-controlling interests
Distributions paid to non-controlling interest
Summarised Cash Flow Information
Net cash flows (used in) operating activities
Net cash flows from financing activities
36
Sibuyan Nickel Properties
Development Corporation
As at
30 June 2018
$
As at
30 June 2017
$
6,851
1,391,411
(1,097,613)
(3,586,234)
6,407
1,419,309
(581)
(4,711,573)
(3,285,585)
(3,286,438)
(837,292)
(837,505)
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2018
$
Year Ended
30 June 2017
$
14
(17,872)
-
(17,872)
-
(17,872)
154
(24,608)
-
(24,608)
-
(24,608)
(4,468)
-
(6,664)
-
Sibuyan Nickel Properties
Development Corporation
Year Ended
30 June 2018
$
Year Ended
30 June 2017
$
(17,872)
-
(24,600)
-
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 18: EARNINGS/(LOSS) PER SHARE
The following reflects the income and data used in the calculations of basic and diluted (loss)/profit per share:
Profit/(Loss) before income tax – Group
Adjustments:
Profit/(Loss) attributable to non-controlling interest
Profit/(Loss) used in calculating basic and diluted earnings/(loss) per
share
Weighted average number of ordinary shares used in calculating:
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
NOTE 19: COMMITMENTS FOR EXPENDITURE
The Consolidated Entity has no commitments for expenditure (2017: $nil).
Consolidated
2018
$
2017
$
3,221,041
(455,250)
4,468
6,664
3,225,509
(448,586)
2018
Number of
Shares
2017
Number of
Shares
361,923,540
386,923,540
361,923,540
361,923,540
37
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 20: SEGMENT INFORMATION
Business Segments
The directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the
Board) in allocating resources and have concluded that at this time there are no separate identifiable business segments.
The operations and assets of Pelican Resources Limited and its controlled entities are employed in exploration activities relating to minerals in Australia and the
Philippines.
Australia
Philippines
Eliminations
Consolidated
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Geographical Segments
Revenue
Other revenues from customers
outside the Consolidated Entity
Total segment revenue
3,881,641
20,952
3,881,641
20,952
14
14
154
154
-
-
3,881,655
21,106
3,881,655
21,106
Results
Segment result
Assets
Segment assets
Liabilities
Segment liabilities
4,487,513
(447,875)
(13,779)
(21,099)
(1,252,693)
13,724
3,221,041
(455,250)
5,672,195
2,491,928
2,175,081
2,202,654
(950,001)
(951,001)
6,897,275
3,743,581
2,844,240
3,060,810
7,169,710
8,469,495
(7,503,519)
(8,781,711)
2,510,431
2,748,593
38
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21: RISK MANAGEMENT OBJECTIVES AND POLICIES
The Consolidated Entity’s principal financial instruments comprise cash and short-term deposits, short-term
loans and investments in listed entities.
The main purpose of these financial instruments is to finance the Consolidated Entity’s operations. The
Consolidated Entity has various other financial assets and liabilities such as other receivables and trade
payables, which arise directly from its operations. It is, and has been throughout the entire period under review,
the Consolidated Entity’s policy that trading in financial instruments may be undertaken.
The main risks arising from the Consolidated Entity’s financial instruments is cash flow interest rate risk, credit
risk, foreign exchange risk and market price risk. Other minor risks are either summarised below or disclosed
at Note 12 in the case of capital risk management. The Board reviews and agrees policies for managing each
of these risks.
Cash Flow Interest Rate Risk
The Consolidated Entity’s exposure to the risks of changes in market interest rates relates primarily to the
Consolidated Entity’s short-term deposits with a floating interest rate. These financial assets with variable
rates expose the Consolidated Entity to cash flow interest rate risk. All other financial assets and liabilities in
the form of receivables and payables are non-interest bearing. The Consolidated Entity does not engage in any
hedging or derivative transactions to manage interest rate risk.
The Consolidated Entity has not entered into any hedging activities to cover interest rate risk. In regard to its
interest rate risk, the Consolidated Entity does not have a formal policy in place to mitigate such risks.
The following tables set out the carrying amount by maturity of the Consolidated Entity’s exposure to interest
rate risk and the effective weighted average interest rate for each class of these financial instruments. There
were no fixed interest rate financial assets or liabilities held by the Consolidated Entity (2017: nil).
Non Interest
Bearing
$
Weighted
Average Effective
Interest Rate %
Floating
Interest Rate
$
Total
$
2018
2017
2018
2017
2018
2017
2018
2017
2,127,459
-
18,794
1,500,000
3,646,253
445,755
-
20,916
-
466,671
87,217
-
1,098,737
1,185,954
86,597
131,521
1,119,039
1,337,157
-
1.75
-
-
-
-
-
-
1.75
-
-
-
1,054,000
-
-
1,054,000
-
1,054,000
-
1,054,000
2,127,459
1,054,000
18,794
1,500,000
4,700,253
445,755
1,054,000
20,916
-
1,520,671
-
-
-
-
-
-
-
-
-
-
-
87,217
-
1,098,737
1,185,954
86,597
131,521
1,119,039
1,337,157
Financial Assets
- Cash and cash equivalents
- Deposits held
- GST receivable
- Unlisted investments
Total Financial Assets
Financial Liabilities
- Trade creditors
- GST payable
- Loan – other parties
Total Financial Liabilities
Net Financial Assets / (Liabilities)
2,460,299
(870,486)
1,054,000
1,054,000
3,514,299
183,514
39
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest Rate Sensitivity
At 30 June 2018, if interest rates had changed by 10% during the entire year with all other variables held constant,
profit/(loss) for the year and equity would have been $1,898 lower/higher, mainly as a result of lower/higher interest
income from cash and cash equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short term
and long term Australian dollar interest rates. A 10% increase sensitivity would move short term interest rates at
30 June 2018 from around 1.75% to 1.93% (10% decrease: 1.6%) representing an 18 basis points shift. This would
represent one increase which is reasonably possible in the current environment with the bias coming from the
Reserve Bank of Australia and confirmed by market expectations that interest rates in Australia are more likely to
move up than down in the coming period.
Based on the sensitivity analysis, only interest revenue from variable rate deposits and cash balances are impacted
resulting in a decrease or increase in overall income.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, to
recognised financial assets is the carrying amount net of any provisions for impairment of those assets, as disclosed
in the statement of financial position and notes to the financial statements.
As at 30 June 2018, the Consolidated Entity had a balance of $Nil (2017: $923,838) owing from Pluton Resources
Limited.
Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash reserves and marketable securities and through
the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of liabilities at 30 June
Payables
- less than 30 days
- less than 12 months
Loans other parties
- less than 12 months
- greater than 12 months
Consolidated
2018
$
2017
$
87,217
-
86,597
131,521
7,308
1,091,014
1,185,539
7,429
1,112,889
1,338,436
The amount of $1,091,014 are liabilities associated with assets held for sale which have been disclosed under current
liabilities as the disposal of Sibuyan Nickel Properties Development Corporation is expected within 12 months (note
26).
40
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Foreign Exchange Risk
The Consolidated Entity is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the Philippine PESO. No sensitivity analysis has been completed as the directors believe any impact
would be immaterial.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the Company’s and subsidiaries’ functional currencies. The risk is
measured using sensitivity analysis.
Market Price Risk
The Group is exposed to equity price risk which arises from available-for-sale-equity securities.
The Consolidated Entity is exposed to market price risk arising from investments in other companies carried at fair
value. At 30 June 2018, if the fair value of investments in other companies had changed by 10% during the entire
year with all other variables held constant, profit/(loss) for the year and equity would have been $150,000
lower/higher. The Company holds shares in Cockatoo Iron NL which is held at fair value and has provided in full
for the investment in Pluton Resources Limited.
Net Fair Values
For assets and other liabilities the net fair value approximates their carrying value. The Consolidated Entity has no
financial liabilities but does have financial assets that are readily traded on organised markets at balance date and
has no financial assets where the carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to and forming part of the financial statements.
Financial Instruments
The following table presents the Company’s assets and liabilities measured and recognised at fair value:
30 June 2018
Assets
Available for Sale Financial Assets
30 June 2017
Assets
Available for Sale Financial Assets
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
1,500,000
1,500,000
1,500,000
1,500,000
Level 1
$
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
-
-
41
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 21: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial Instruments (continued)
Valuation techniques
The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the
previous reporting period.
Fair Value Hierarchy
Level 3
Available-for-sale investments
Fair value has been determined by reference to the cost of the asset.
NOTE 22: EVENTS SUBSEQUENT TO REPORTING PERIOD
No matters or circumstances have arisen subsequent to the balance date which would significantly affect the
operations of the Company, its operating results or its state of affair in the subsequent financial years.
NOTE 23: CONTINGENT LIABILITIES
As part of its acquisition of Nugold Hill Mines in 2002, the Company has an obligation to rehabilitate the
Xanadu tenements area. The Company has a security bond in place with the Department of Mines, Industry,
Regulation and Safety which is expected to cover the majority of the cost. The Department of Mines, Industry,
Regulation and Safety has not currently insisted on rehabilitating the site as there is the potential for future
operations.
Other than as stated above, Pelican Resources Limited has no known material contingent liabilities at the end
of the financial year.
42
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 24: SHARE BASED PAYMENTS
The number and weighted average exercise prices of share options are as follows:
Outstanding at 1 July
Forfeited during the year
Exercised during the year
Expired during the year
Granted during the year
Issued during the year
Outstanding at 30 June
Exercisable at 30 June
Weighted
average exercise
price
2018
$0.02
-
-
-
-
-
$0.02
$0.02
Number of
Options
2018
85,000,000
-
-
-
-
-
85,000,000
85,000,000
Weighted
average exercise
price
2017
$0.02
-
-
$0.02
-
-
$0.02
$0.02
Number of
Options
2017
144,725,571
-
-
(59,725,571)
-
-
85,000,000
85,000,000
The options outstanding at 30 June 2018 have an exercise price of $0.02 and a weighted average remaining
contractual life of 1.5 years (2017: 2.5 years).
The following table lists the inputs to the models used for the valuation of the options issued in 2016:
Director
options
Consultant
options
Advisor
options
Number of options
Fair value at measurement date (cents)
Dividend yield (%)
Expected volatility (%)
Risk free rate (%)
Expected life of option
Share price (cents)
Exercise price (cents)
Model used
20,000,000
0.8
Nil
100
2.25
4
1.3
2
500,000
0.6
Nil
100
2.25
4
1.0
2
Black-scholes Black-scholes Black-scholes
14,500,000
0.4
Nil
100
2.25
4
0.8
2
43
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 25: PARENT ENTITY DISCLOSURES
(a) Financial Position
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(b) Financial Performance
Profit/(Loss) for the year
Other comprehensive income
Total Comprehensive Loss
(c) Guarantees
2018
$
3,222,194
5,672,195
1,112,585
1,112,585
2017
$
1,540,237
2,491,238
1,157,694
1,157,694
13,630,120
1,937,083
(11,007,593)
13,630,120
1,930,542
(14,227,117)
4,559,609
1,333,545
3,219,524
-
(447,487)
-
3,219,524
(447,487)
The parent entity has not entered into any guarantees, in relation to the debts of subsidiaries.
(d) Contingent liabilities
As part of its acquisition of Nugold Hill Mines in 2002, the Company has an obligation to rehabilitate the
Xanadu tenements area. The Company has a security bond in place with the Department of Mines, Industry,
Regulation and Safety which is expected to cover the majority of the cost. The Department of Mines, Industry,
Regulation and Safety has not currently insisted on rehabilitating the site as there is the potential for future
operations.
Other than as stated above, the parent entity has no known material contingent liabilities at the end of the financial
year.
(e) Commitments for expenditure
The parent entity has not entered into any commitments for expenditure as at the end of the financial year.
44
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
NOTE 26: ASSETS AND LIABILITIES HELD FOR SALE
In June 2015, the Company entered into a Memorandum of Understanding (“MOU”) with Dynamo Atlantic Limited
to sell 100% ownership of Sibuyan Nickel Properties Development Corporation (“SNPDC”) for a purchase price of
$4.7 million (refer Directors’ Report for further detail).
Assets and liabilities held for sale
The major classes of assets and liabilities comprising the operations classified as held for sale at balance date are as
follows:
Cash
Trade and other receivables
Mineral exploration and evaluation expenditure (note 10)
Assets held for sale
Trade payables
Other payables
Liabilities associated with assets held for sale
2018
$
2,261
4,976
2,167,844
2,175,081
415
1,098,322
1,098,737
2017
$
2,470
4,442
2,195,742
2,202,654
424
1,119,039
1,119,463
The Company has received $1.41 million as deposits for the sale of SNPDC and $0.94 million has been classified
as restricted cash as the formal sale agreement has not yet been executed.
45
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors:
a.
the accompanying financial statements, notes and additional disclosures are in accordance with the
Corporations Act 2001 including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
performance for the year then ended; and
ii.
complying with Accounting Standards and Corporations Regulations 2001; and
b.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is signed in accordance with a resolution of the Board of Directors.
_______________________
Alec Pismiris
Director
Dated this 28th day of September, 2018
46
Independent Auditor’s Report
to the Members of Pelican Resources Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Pelican Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. We have determined the matters described below to be the key
audit matters to be communicated in our report.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
47
Key Audit Matter
How our audit addressed the key audit
matter
Recoverability of deferred exploration assets
Note 26 of the financial statements
As at 30 June 2018, the carrying value of the Group’s
Exploration Asset Held for Sale was $2,175,081. The
mining rights
the
Philippines is the subject of the exploration asset that
is currently in negotiation for sale.
the Romblon Project
for
in
Prior to the 2018 financial year, the Group entered into
a sale agreement with Dynamo Atlantic Limited for the
sale of the rights to the Romblon Project.
As at 30 June 2018, the entity was still in negotiations
with Dynamo Atlantic Limited in regards to completion
of the sale agreement and realising the valuation of
the asset.
This is considered a Key Audit Matter due to the
impact of the disclosure in the annual financial report
and the degree of uncertainty surrounding the
completion of the sale.
Our procedures included but were not
limited to the following:
- We obtained a copy of the latest
amended memorandum of understanding
between Pelican Resources Limited and
Dynamo Atlantic Limited;
reviewed correspondence with
- We
Dynamo Atlantic in regard to negotiations
on proposed agreement amendments;
- We reviewed correspondence in regard
to the continued negotiations of the sale;
- We obtained evidence that the Group
has current rights to tenure of its area of
interest;
- We enquired with management,
reviewed ASX announcements and
reviewed minutes of Directors’ meetings to
ensure that the Group had not resolved to
discontinue efforts to sell the tenement;
and
- We examined the disclosures made in
the financial report.
Taxation
Note 4 of the financial statements
As at 30 June 2018, the consolidated entity has
recognised an income tax expense of $85,523.
Our procedures included but were not
limited to:
We considered this to be a key audit matter as it
involved the most communication with management
and was an area which required significant audit
effort.
- We considered the tax calculations
provided by management and critically
assessed them for reasonableness; and
- We ensured the disclosures within the
financial report were appropriate and in
line with the requirements of accounting
standards.
48
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2018, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
49
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Pelican Resources Limited for the year ended 30 June 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 September 2018
N G Neill
Partner
50
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Pelican Resources Limited for the
year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 September 2018
N G Neill
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers
51
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION
QUOTED SECURITIES
ORDINARY FULLY PAID SHARES
(i)
DISTRIBUTION OF SHAREHOLDERS AS AT 21 SEPTEMBER 2018:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
1 – 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
33
33
23
89
161
339
NO. OF
SHARES
11,524
80,012
166,211
4,278,704
357,387,089
361,923,540
PERCENTAGE OF
ISSUED CAPITAL %
0.00
0.02
0.05
1.18
98.75
100.00
The number of shareholdings held in less than marketable parcels is 125.
(ii)
TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES:
The names of the twenty largest shareholders of ordinary fully paid shares are listed below:
NAME
Monslit Pty Ltd
Mr Kenneth Gatchalian
Zero Nominees Pty Ltd
Mr Joe Leuzzi & Mrs Sally Leuzzi
DF Lynton-Brown Pty Ltd
Gallant (WA) Pty Ltd
Alitime Nominees Pty Ltd
Topaze Enterprises Pty Ltd
Darlot Investments Pty Ltd
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. GAB Superannuation Fund Pty Ltd
11. Mr Jose Mari Moraza & Mr Antonio Moraza
12.
13. Mr GJ Fennell & Mrs CA Fennell
14. ACP Investments Pty Ltd
15. ACP Investments Pty Ltd
16.
17.
18.
19.
20.
Citicorp Nominees Pty Limited
Topaze Enterprises Pty Ltd
Energy-Saving Technology Pty Ltd
Rfid Systems Pty Ltd
Cityscan Pty Ltd
Topaze Enterprises Pty Ltd
NO. OF
ORDINARY
SHARES
HELD
PERCENTAGE
OF ISSUED
SHARES %
59,193,981
25,699,591
19,593,650
16,102,148
13,932,885
12,094,137
10,100,000
9,484,049
8,000,000
7,873,785
7,272,445
6,229,134
6,200,000
6,000,000
6,000,000
5,366,603
5,313,513
5,313,513
5,313,512
5,177,757
249,334,578
16.36
7.10
5.41
4.45
3.85
3.34
2.79
2.62
2.21
2.18
2.01
1.72
1.71
1.66
1.66
1.48
1.47
1.47
1.47
1.43
68.89
52
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
ASX ADDITIONAL INFORMATION (continued)
QUOTED SECURITIES (continued)
(a)
ORDINARY FULLY PAID SHARES (continued)
(iii)
VOTING RIGHTS
Article 15 of the Constitution specify that on a show of hands every member present in person, by
attorney or by proxy shall have:
(a)
(b)
for every fully paid share held by him one vote; and
for every share which is not fully paid a fraction of the vote equal to the amount paid up on
the share over the nominal value of the shares.
(iv)
SUBSTANTIAL SHAREHOLDERS
Name
Moonslit Pty Ltd
Mr Kenneth Gatchalian
Zero Nominees Pty Ltd
Ordinary Shares
No.
59,193,981
25,699,591
19,593,650
84,893,572
%
16.36
7.10
5.41
28.87
(b)
UNQUOTED SECURITIES
(a)
UNLISTED OPTIONS ON ISSUE
- 50,000,000 unlisted options exercisable at $0.01 each on or before 30 June 2019.
- 35,000,000 unlisted options exercisable at $0.02 each on or before 31 December 2019.
(b)
PERFORMANCE RIGHTS
The Company has no performance rights on issue.
53
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices adopted by the Board of Pelican Resources Limited
(“Pelican” or the “Company”), which comply with the ASX Corporate Governance Council recommendations
unless otherwise stated.
The Board and management of Pelican recognise their duties and obligations to shareholders and other stakeholders
to implement and maintain a proper system of corporate governance. The Company believes that good corporate
governance adds value to stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they have
complied with the recommendations of the ASX Corporate Governance Council (“Recommendations”) in the
reporting period. The Recommendations are guidelines designed to improve the efficiency, quality and integrity of
the Company. They are not prescriptive, in that if a company considers a recommendation to be inappropriate
having regard to its own circumstances, it has the flexibility not to follow it. Where a company has not followed
all the Recommendations, it must identify which Recommendations have not been followed and give reasons for
not following them.
This Corporate Governance Statement (“Statement”) sets out a description of the Company’s main corporate
practices and provides details of the Company’s compliance with the Recommendations, or where appropriate,
indicates a departure from the Recommendations with an explanation.
This Statement is current as at 28 September 2018 and has been approved by the Board of Directors of Pelican.
Principle 1 – Lay solid foundations for management and oversight
Recommendation
1.1
A listed entity should disclose:
Requirement
Comply
Yes/No
1.2
1.3
1.4
(a) The respective roles and responsibilities of its board and management: and
(b) Those matters expressly reserved to the board and those delegated to
Yes
management.
A listed entity should:
(a) Undertake appropriate checks before appointing a person, or putting forward
to security holders a candidate for election, as a director: and
(b) Provide security holders with all material information in its possession
relevant to a decision on where or not to elect or re-elect a director.
A listed entity should have a written agreement with each director and senior
executive setting out the terms of their appointment.
The company secretary of a listed entity should be accountable directly to the board,
through the chair, on all matters to do with the proper functioning of the board.
Yes
Yes
Yes
54
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Recommendation
1.5
A listed entity should:
Requirement
(a) Have a diversity policy which includes requirements for the board or a
relevant committee of the board to set measurable objectives for achieving
gender diversity and to assess annually both the objectives and the entity’s
progress in achieving them:
(b) Disclose the policy or a summary of it: and
(c) Disclose as at the end of each reporting period the measurable objectives
for achieving gender diversity set by the board or a relevant committee of
the board in accordance with the entity’s diversity policy and its progress
towards achieving them and either:
1) The respective proportions of men and women on the board, in
senior executive positions and across the whole organisation
(including how the entity has defined “senior executive” for these
purposes): or
If the entity is a “relevant employer” under the Workplace Gender
Equality Act, the entity’s most recent “Gender Equality
Indicators”, as defined in and published under the Act.
2)
Comply
Yes/No
Yes
1.6
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of
the board, its committees and individual directors: and
(b) Disclose, in relation to each reporting period, whether a performance
Yes
evaluation was undertaken in the reporting period in accordance with that
process.
1.7
A listed entity should:
(a) Have and disclose a process for periodically evaluating the performance of
its senior executives; and
(b) Disclose, in relation to each reporting period, whether a performance
evaluation was undertaken in the reporting period in accordance with that
process.
Yes
Commentary
The Corporate Governance Policies set out the functions and responsibilities of the Board of Pelican, and are
available on the Pelican website.
The Company seeks to have a board comprising directors with an appropriate variety of skill, experience and
expertise who are competent in dealing with current and emerging issues of the business and who can effectively
review and challenge the performance of management and exercise independent judgement. The Board has
procedures for the selection and appointment of new directors and the re-election of incumbent directors, which are
set out in the Corporate Governance Policies which are available on the Pelican website.
Non-executive directors have written agreement with the Company setting out the terms of their appointment as
directors, the one executive director has an employment contract.
The Board meets on a regular basis. The agenda for these meetings is prepared by the Company Secretary who is
also the Managing Director, in conjunction with the Chairman. Relevant information is circulated to directors in
advance of the Board meetings. The Company Secretary is accountable directly to the Board on matters to do with
the proper functioning of the Board.
The Board has adopted a policy on achieving gender, age and ethnic diversity in the Company’s board and
employees.
55
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The respective proportions of men and women on the Board, in senior executive positions and across the whole
organisation is as follows:
Gender
Total
Female
Male
%Female
Senior Management
-
1
-
-
4
-
Board
-
3
-
The evaluation of the performance of the Board and individual directors is undertaken annually and in accordance
with the terms of their employment contract. Performance reviews were undertaken in the reporting period.
Principle 2 – Structure the Board to add value
Recommendation
2.1
The board of a listed entity should:
(a) Have a nomination committee which:
Requirement
Comply
Yes/No
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by an independent director,
2)
and disclose
3) The charter of the committee:
4) The members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; OR
(b) If it does not have a nomination committee, disclose that fact and the
processes it employs to address board succession issues and to ensure that the
board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and
responsibilities effectively.
A listed entity should have and disclose a board skills matric setting out the mix of
skills and diversity that the board currently has or is looking to achieve in its
membership.
A listed entity should disclose:
(a) The names of the directors considered by the board to be independent
directors;
(b) If a director has an interest, position, association or relationship of the type
describe in Box 2.3 but the board is of the opinion that it does not
compromise the independence of the director, the nature of the interest,
position, association or relationship in question and an explanation of why
the board is of that opinion; and
(c) The length of service of each director.
A majority of the board of a listed entity should be independent directors.
The Chair of the board of a listed entity should be independent director and, in
particular, should not be the same person as the CEO/Managing Director of the entity.
A listed entity should have a program for inducting new directors and provide
appropriate professional development opportunities for directors to develop and
maintain the skills and knowledge needed to perform their role as directors
effectively.
Yes
Yes
Yes
No
Yes
Yes
56
2.2
2.3
2.4
2.5
2.6
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Commentary
The Board believes the Company is not of sufficient size to justify having a Nomination Committee. If any
vacancies arise on the Board, the Board and all directors are involved in the search and recruitment of a replacement.
The Board strives to ensure that it is comprised of directors with a blend of skills, experience and attributes
appropriate to the Company and its business. The principal criterion for the appointment of new directors is their
ability to add value to the Company and its business. In light of this, it has not been deemed necessary to create a
formal document setting out the mix of skills and diversity that the Board currently has or is looking to achieve in
its membership.
The Board consists of Executive Director Mr Antonio Torresan (appointed 24 March 2015), Independent non-
executive director Mr Colin Chenu (appointed 29 June 2015) and Non-executive director Mr Alec Pismiris
(appointed 24 March 2015). The details of their skills, experience and expertise have been included in the 2018
Directors Report. The number of Board meetings and attendance of the directors are set out in the 2018 Directors
Report.
Although the majority of the Board is not independent, the directors considers the current Board composition to be
suitable in the present circumstances, with an appropriate range of qualifications and expertise, and directors who
can understand and competently deal with current and emerging business issues as well as effectively review and
challenge the performance of management. Furthermore, each individual member of the Board is satisfied that all
directors bring an independent judgement to bear on board decisions.
New directors are provided with copies of all relevant documents and policies governing the Company’s business,
operations and management at the time of joining the Board. The Company is able to provide appropriate
professional development opportunities for directors to assist in their roles. Directors are also encouraged to
personally undertake appropriate training and refresher courses conducted by the Australian Institute of Company
Directors.
Principle 3 – Act ethically and responsibly
Recommendation
3.1
A listed entity should:
Requirement
(a) Have a code of conduct for its directors, senior executives and employees;
and
(b) Disclose that code or a summary of it.
Comply
Yes/No
Yes
Commentary
As part of the Board’s commitment to maintaining a proper system of corporate governance, the Company has
adopted a Code of Conduct to guide directors and officers in carrying out their duties and responsibilities. The Code
embraces the values of honesty, integrity, enterprise, excellence, accountability, justice, independence and equality
of stakeholder opportunity. The Code of Conduct is available on the Pelican website.
57
PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 4 – Safeguard integrity in corporate reporting
Recommendation
4.1
The board of a listed entity should:
(a) Have an audit committee which:
Requirement
Comply
Yes/No
1) Has at least three members, all of whom are non-executive
2)
directors and a majority of whom are independent directors; and
Is chaired by an independent director, who is not the chair of the
board, and disclose;
3) The charter of the committee;
4) The relevant qualifications and experience of the members of the
5)
committee; and
In relation to each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have an audit committee, disclose that fact and the processes it
employs that independently verify and safeguard the integrity of its
corporate reporting, including the processes for the appointment and
removal of the external auditor and the rotation of the audit engagement
partner.
The board of a listed entity should, before it approves the entity’s financial
statements for a financial period, receive form its CEO and CFO a declaration that,
in their opinion, the financial records of the entity have been properly maintained
and that the financial statements comply with the appropriate accounting standards
and give a true an fair view of the financial position and performance of the entity
and that the opinion has been formed on the basis of a sound system of risk
management and internal control which is operating effectively.
A listed entity should that has an AGM should ensure that its external auditor
attends its AGM and is available to answer questions from security holders relevant
to the audit.
Yes
Yes
Yes
4.2
4.3
Commentary
The board believes that due to the size and composition of the board and the size of the Company it is not appropriate
to have an Audit Committee. The Board as a whole is responsible for the integrity of the Company’s financial
reporting, reviews and oversees the planning process for external audits, the conduct of the external audit process
and the independence of all parties to the process as well as reviewing the performance of external auditors, the
processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.
Prior to the approval of the Company’s annual financial statements, the board obtains a declaration from its
Company Secretary and CFO that , in their opinion, the financial records of the Company have been properly
maintained and that the financial statements comply with appropriate accounting standards and give a true and fair
view of the financial position and performance of the Company, and that the opinion has been formed on the basis
of a sound system of risk management and internal control which is operating effectively.
The Company’s external auditor attends every Annual General Meeting as required by the Corporations Act, and
member are allowed a reasonable opportunity at the meeting to ask the auditor questions relevant to the audit, their
report and independence, and the accounting policies adopted by the company.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 5 – Make timely and balanced disclosure
Recommendation
5.1
A listed entity should:
Requirement
(a) Have a written policy for complying with its continuous disclosure
obligations under the Listing Rules; and
(b) Disclose that code or a summary of it.
Comply
Yes/No
Yes
Commentary
The Company’s Disclosure Policy is available on the Pelican website. The Disclosure Policy sets out the key
obligations of directors and employees in relation to continuous disclosure as well as the Company’s obligation
under the ASX Listing Rules and the Corporations Act. The Policy also provides procedures for internal notification
and external disclosure, as well as procedures for promoting understanding of compliance with disclosure
requirements.
Principle 6 – Respect the rights of security holders
Requirement
A listed entity should provide information about itself and its governance to
investors via a website.
A listed entity should design and implement an investor relations program to
facilitate effective two-way communication with investors.
A listed entity should disclose the policies and processes it has in place to facilitate
and encourage participation at meeting so security holders.
A listed entity should give security holders to option to receive communicating from
and send communications to, the entity and its security registry electronically.
Comply
Yes/No
Yes
Yes
Yes
Yes
Recommendation
6.1
6.2
6.3
6.3
Commentary
The Board is committed to open and accessible communications with holders of the Company’s shares. In
accordance with continuous disclosure obligations under the ASX Listing Rules, all disclosure are made in a time
manner and posted on the Company’s website.
Shareholders are forwarded the Company’s Annual Report, if requested and documents relating to each General
Meeting, being the Notice of Meeting, any Explanatory Memorandum and a Proxy Form, and shareholders are
invited to attend these meetings. Shareholders may elect to receive communications electronically. The Company’s
external auditors are also required to be present at annual shareholder meetings to answer any queries shareholders
may have with regard to the audit and preparation and content of the Audit Report.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
Principle 7 – Recognise and manage risk
Recommendation
7.1
The board of a listed entity should:
(a) Have a committee or committees to oversee risk, each of which;
Requirement
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by and independent director and disclose;
2)
3) The charter of the committee
4) The ;members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
If it does not have a risk committee or committees that satisfy (a) above, disclose
that fact and the processes it employs for overseeing the entity’s risk management
framework.
The board or a committee of the board should;
(a) Review the entity’s risk management framework at least annually to satisfy
itself that it continues to be sound; and
(b) Disclose, in relation to each reporting period, whether such review has
taken place.
A listed entity should disclose:
(a) If it has an internal audit function, how the function is structured and what
role it performs; or
(b) If it does not have an internal audit function, that fact and the processes it
employs for evaluating and continually improving the effectiveness of its
risk management and internal control processes.
A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and, if it does, how it manages or
intends to manage those risks.
7.2
7.3
7.4
Commentary
Comply
Yes/No
Yes
Yes
Yes
Yes
The board as a whole is ultimately responsible for establishing and reviewing the Company’s policies on risk
profile, oversight and management and satisfying itself that management has developed and implemented a sound
system of risk management and internal control in accordance with the Company’s Corporate Governance
Policies.
The board believes that due to the size and composition of the board, and the size of the Company it is not
appropriate to have a Risk Committee.
The Company’s risk management program is implemented under the direction of the Chief Executive Officer to
ensure matters affecting goals, objectives and performance of the Company and the safety of its stakeholders are
identified and assessed by an operational risk management framework in accordance with industry accepted
standards.
The Company’s risk management framework is reviewed annually. A review was undertaken in the reporting
period.
The board believes that the Company is not of a size to justify having an internal audit function for efficiency
purposes. The Company evaluates its risk management and internal control processes in consultation with its
external auditor with a view to continually improving its effectiveness.
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PELICAN RESOURCES LIMITED AND CONTROLLED ENTITIES
CORPORATE GOVERNANCE STATEMENT (CONTINUED)
The board does not believe the Company has any material exposure to economic, environmental and social
sustainability risks at the present time.
Principle 8 – Remunerate fairly and responsibly
Recommendation
8.1
The board of a listed entity should:
(a) Have a remuneration committee which’
Requirement
1) Has at least three members, a majority of whom are independent
directors; and
Is chaired by an independent director, and disclose
2)
3) The charter of the committee;
4) The members of the committee; and
5) As at the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a remuneration committee, disclose that fact and the
processes it employs for setting the level and composition of remuneration
for directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
Comply
Yes/No
Yes
8.2
Commentary
A listed entity should separately disclose its policies and practices regarding the
remuneration of non-executive directors and the remuneration of executive directors
and other senior executives.
Yes
The Board believes it is not of a size to justify having a Remuneration Committee. The Company’s remuneration
policy is structured for the purpose of motivating executive directors and senior management to pursue the long-
term growth and success of the Company. The Board sets the level and structure of remuneration to executive
directors and senior executives for the purpose of balancing the Company’s competing interest of attracting and
retaining executive directors and senior management and not paying excessive remuneration.
61